Veteran lawyer Ashok Kumar sees fresh wave of restructuring deals as sliding interest rates lure investors

Source: Business Times
Article Date: 03 Sep 2025
Author: Tessa Oh

Such activity is subdued in Singapore, but some Covid-era ‘zombie companies’ could face financial stress as they struggle to adapt to the new economy, he adds.

Restructuring activity is set to rebound after a three-year lull as falling interest rates draw investors back to the market, said well-known lawyer Ashok Kumar, who is already seeing increased inquiries.

Ashok and his team are positioning themselves to capitalise on the expected uptick, having joined Bird & Bird ATMD, the Singapore-associated office of international firm Bird & Bird. The veteran lawyer is now a partner at the law firm.

The move saw the lawyer leave and close BlackOak, a boutique firm he co-founded in 2016, which had established itself as a specialised restructuring and insolvency practice in Singapore’s competitive legal market.

While it was sad to let the firm go, the decision was driven by the need for greater capital, resources and bench strength to not only continue existing work, but also expand and capture more opportunities across the region, Ashok told The Business Times.

Joining a larger outfit, with access to an international network, was always part of the plan, he said. “I have to think of the longevity of the team… (I have to) think of the young people, give them a path to grow.”

The move comes at a crucial time as artificial intelligence (AI) disrupts the legal industry. In this environment, law firms must invest in technology to remain competitive, Ashok noted.

“The key question firms are going to have to ask themselves is whether they want to scale. If they want to scale, the investment is heavy.”

At Bird & Bird, the IT investment has been “very significant”, he noted. “It’s hard for a mid-size firm, like where BlackOak was, to invest like that.

“The disruption from AI is just going to be unavoidable. If, as law firms, we don’t take it seriously, there will be problems in the future for us.”

Bouncing back

The move is also well-timed, as restructuring deals stage a comeback after a prolonged slowdown.

Activity had declined significantly from levels seen three years ago due to global economic uncertainty, particularly in the lead-up to the 2024 United States presidential election, Ashok explained.

In contrast, the insolvency practice has kept busy, mainly due to the collapse of many cryptocurrency companies.

With interest rates now declining and expected to remain low, liquidity is returning to the market along with investor appetite, he said.

What remains uncertain, however, is how the US tariffs will impact the economy. Ashok expects the tariff situation to eventually stabilise – though the effects on inflation and global trade remain to be seen.

Still, he noted that the tariffs will definitely impact South-east Asia, due to the many export-oriented economies in the region.

With China also not filling the demand gap, regional economies will need to adapt to the changing trade landscape. “We have to just wait and see. I think the dust will settle,” he added.

Closer to home

As for specific sectoral restructuring opportunities, Ashok sees potential for rationalisation across sectors such as technology and retail.

Technology startups appear particularly vulnerable, with Ashok noting that not all the numerous players in the space will survive the current market conditions.

Brick-and-mortar retail, which he described as a “slow-death sector”, also presents opportunities as the industry continues its structural decline.

In Singapore specifically, restructuring activity has been low for the past two years. But Ashok expects that there will be some companies that could end up in financial stress in the next two years.

“Some of it is legacy from Covid,” he explained. “There are a lot of zombie companies just plodding along in a business that perhaps is not relevant to the new economy, but the balance sheet is solvent.”

Such companies are going through a slow death. “If they don’t pivot, or if liquidity starts to dry up, there are going to be some companies that are just going to face difficulties.”

His advice to companies facing problems? Reach out for help earlier, rather than later, when the restructuring options narrow.

He said: “When it is just stressed, but not distressed or insolvent, the company has more value, and when the company has value, getting a restructuring done is easier.”